Zcash shed 7.6% of its value on the day, defying what would typically be considered a regulatory win, after the Zcash Foundation announced the U.S. Securities and Exchange Commission (SEC) had concluded its investigation into the public charity without recommending enforcement action.
The Zcash Foundation declared that the SEC has officially closed its investigation into the organization, opting against recommending any enforcement action. The inquiry, which kicked off in August 2023, had raised eyebrows over certain crypto asset offerings but has now been put to bed.
Following the news, the ZEC token briefly surged 12%, erasing a recent slump. However, today’s downward trajectory underscores a familiar dynamic in crypto trading, where lingering uncertainty around privacy coins can easily outweigh favorable regulatory developments.
The announcement, disclosed in a statement on Tuesday, seemed to remove a major overhang for the privacy-focused cryptocurrency, which has long faced heightened scrutiny from regulators. But the market reaction highlighted a classic crypto conundrum: broader risk sentiment, profit-taking, or persistent doubts about privacy coins can drown out even the best regulatory news.
What actually went down? The foundation received a subpoena from the SEC on August 31, 2023, as part of an inquiry titled “In the Matter of Certain Crypto Asset Offerings (SF-04569),” the statement noted. The SEC informed the foundation it does not plan to recommend any enforcement actions or changes pertaining to the organization.
The ZEC token surged 12% following the announcement, according to market data. Indeed, the price bump reversed a recent decline in the cryptocurrency’s value. But it didn’t hold. The token is down 3.7% for the week, and up just 0.2% for the month.
Sure, over the course of a year, it’s up a staggering 642.3%, but it remains significantly below (-87.2%) its all-time high.
The development comes amid shifts in digital asset regulation under the current administration, including the appointment of Paul Atkins as SEC chair. The commission dropped similar enforcement actions against companies including Uniswap, Coinbase, and Robinhood in 2024, according to regulatory filings.
In its statement, the foundation said it remains committed to transparency and regulatory compliance. The organization stated its focus continues to be advancing financial infrastructure that preserves user privacy.
